How Does Your Credit Score Compare To Your Neighbors?

Few things get people more fired up than rivalries between states. State lines become battlegrounds over sports, economics, culture ... and credit scores?

A credit score comparison may not have the same intensity as a college football game, but we're Americans. We make everything a competition.

So, who's number one in high credit scores? According to the latest Experian State of Credit report, Minnesota tops the list with a 709 average on the VantageScore scale (ranging from 300 to 850).

The report, released in 2018 using data from 2017, shows strong regional blocks of credit score trends.

Nine of the top ten credit score states are located in either the upper Midwest or the Northeast. Behind Minnesota, the top credit scores are Vermont (702), New Hampshire (701), South Dakota (700), Massachusetts (699), North Dakota (697), Wisconsin (696), Iowa (695), Nebraska (695), and Hawaii (693).

The ten states with the worst credit scores are mostly clustered in the Mid-South and Southeast. The worst average credit score is found in Mississippi (647), followed by Louisiana (650), Georgia (654), Alabama (654), Nevada (655), Texas (656), Oklahoma (656), South Carolina (657), Arkansas (657), and West Virginia (658).

Why do credit scores form regional clusters? Does cold weather discourage irresponsible spending while warm weather encourages it? A weather correlation seems unlikely, given the increase in online shopping from the comfort of your home.

Maybe the key is debt load? The Experian survey only compares average credit card debts, not overall debt load that could drag down a credit score but the average debt by state doesn't correlate well to credit scores.

Similarly, the cost of living has little connection to credit scores.Many of the states listed in both the top and bottom ten in credit scores have lower-than-average costs of living.

Credit scores are mostly dictated by how well you manage your debt, regardless of where you live or how much money you make. According to the credit reporting agencies, the most influential credit score factor is making all payments on time. Are some region's residents just better organized than others? (Maybe cold-weather residents are stuck in the house too often and run out of things that they'd rather do than pay bills.)

The next most important factor is credit utilization (how much of your credit limit you're using) and the type/length of credit that you have. The total amount of debt that you have also plays a significant role. These factors, along with a few others, interact to determine your credit score.

A credit score is a measure of your overall financial health; thus, a better average high credit score suggests more responsible financial practices but don't be too smug, Minnesotans. You may have the best credit score, but you're middle of the pack in average credit card balance ($5,911), cost of living (2.5% below average), and the average number of credit cards per person (3.0).Your neighbors in Iowa are only fourteen points behind you in average credit score and have the lowest average credit card balance ($5,155), a cost of living that's 9.8% below average, and only 2.7 credit cards per person.

That's just one example of the many bragging rights arguments that states can make with Experian's data. How does your state stack up? Enjoy taunting your neighbors but remember that the only credit score and credit card balances that really matter are your own. Keep your credit score high and your card balances low, and you'll be headed to financial victory.

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